Perryman v. Life Time Fitness, Inc. et al, No. 2:2009cv00452 - Document 45 (D. Ariz. 2009)
Court Description: ORDER denying 39 Defendants' Motion to Dismiss and granting 38 Plaintiff's Motion to Remand to State Court. The Clerk is directed to Remand this action to Maricopa County Superior Court. Signed by Judge G Murray Snow on 12/22/09. (Attachments: #(1) Letter). (LSP)
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Perryman v. Life Time Fitness, Inc. et al 1 Doc. 45 WO 2 NOT FOR PUBLICATION 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 CHERYL PERRYMAN, Plaintiff, 10 11 vs. 12 LIFE TIME FITNESS, INC.; et al., 13 Defendants. 14 ) ) ) ) ) ) ) ) ) ) ) ) No. CV-09-452-PHX-GMS ORDER 15 16 Pending before the Court are the Motion to Remand (Dkt. # 38) filed by Plaintiff 17 Cheryl Perryman (“Plaintiff”) and Defendants’ Motion to Dismiss Party John Hanley (Dkt. 18 # 39). For the following reasons, the Court denies the Motion to Dismiss and Grants the 19 Motion to Remand. 20 BACKGROUND 21 The instant case is a negligence action arising from Plaintiff’s use of exercise facilities 22 at a Life Time Fitness exercise center located in Goodyear, Arizona. In her Amended 23 Complaint, Plaintiff alleges that Defendants Life Time Fitness (“Life Time”) and John 24 Hanley (“Mr. Hanley”), the general manager of the Goodyear exercise center, acted 25 negligently in allowing exercise equipment to operate while unattended. (Dkt. # 34 at ¶ 10.) 26 Plaintiff further alleges that she was injured on January 29, 2007, as a result of a slip and fall 27 that occurred on the unattended exercise equipment. (Id. at ¶ 13.) Pursuant to 28 U.S.C. §§ 28 Dockets.Justia.com 1 1332, 1441(b), the case was removed from Maricopa County Superior Court on March 3, 2 2009. (Dkt. #3.) 3 On March 13, 2009, before Mr. Hanley was joined in this action, Plaintiff filed a 4 Motion to Remand, arguing that complete diversity is lacking in this case because potential 5 defendants—managers employed by Life Time—were Arizona residents. (Dkt. # 9 at 2.) At 6 that time, however, the potential defendants were unknown and were named only as Doe 7 Defendants in Plaintiff’s Complaint. Because, complete diversity existed among the named 8 parties at the time of Plaintiff’s motion, the Court denied the motion to remand. (Dkt. # 10.) 9 Plaintiff then moved to amend her complaint pursuant to Federal Rule of Civil Procedure 10 15(a) to assert a negligence claim against Mr. Hanley, who is an Arizona resident. (Dkt. # 11 25.) After this Court granted Plaintiff’s Motion to Amend (Dkt. # 32), Plaintiff filed an 12 amended complaint naming Mr. Hanley as a Defendant in this action (Dkt. # 33). 13 On October 22, 2009, Plaintiff renewed her Motion to Remand (Dkt. # 38), arguing 14 that because she and Mr. Hanley are both Arizona residents, the Court is now without 15 jurisdiction to hear this case. In their timely response, Defendants Lifetime Fitness and Mr. 16 Hanley (collectively “Defendants”) moved to dismiss Mr. Hanley from this case (Dkt. # 39). 17 Defendants argue that Mr. Hanley was improperly joined under 28 U.S.C. § 1447(e). 18 DISCUSSION 19 I. Defendants’ Motion to Dismiss Party John Hanley Is Denied. 20 The Court did not effect a misjoinder by allowing Plaintiff to join Mr. Hanley. (Dkt. 21 # 39 at 4.) In their Motion to Dismiss, Defendants contest that Mr. Hanley should be 22 dismissed because joinder of Mr. Hanley was improper under 28 U.S.C. § 1447(e). (Id) A 23 proper reading of the Court’s previous order, however, demonstrates that the Court has 24 already addressed this question and determined that joinder was proper. 25 When a plaintiff seeks to join a non diverse defendant to an action removed on the 26 basis of diversity jurisdiction, joinder is governed by 28 U.S.C. § 1447(e). That section 27 provides: “If after removal the plaintiff seeks to join additional defendants whose joinder 28 would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and -2- 1 remand the action to the state court.” 28 U.S.C. § 1447(e). As the Ninth Circuit has observed, 2 the decision to permit joinder of a defendant that destroys diversity jurisdiction is left to the 3 sound discretion of the Court. Newcombe v. Adolf Coors Co., 157 F.3d 686, 691 (9th Cir. 4 1998) (“The language of § 1447(e) is couched in permissive terms and clearly gives the 5 district court the discretion to deny joinder.”). In exercising this discretion, the Court 6 considers the following six factors: 7 8 9 10 (1) whether the would-be defendants are necessary for just adjudication of the controversy, (2) whether the plaintiff still could bring an action in state court against the putative defendants, (3) whether there has been any unexplained delay in joinder, (4) whether it appears the plaintiff is seeking to destroy diversity, (5) the apparent merit of the claims against the new parties, and (6) whether plaintiff would suffer prejudice without the joinder of the defendants. 11 Bonner v. Fuji Photo Film, 461 F. Supp.2d 1112, 1120 (N.D. Cal. 2006) (citation omitted); 12 see also Ansley v. Metro Life Ins. Co., 215 F.R.D. 575, 579–80 (D. Ariz. 2003). 13 In the instant case, the Court has already determined that joinder of Mr. Hanley was 14 appropriate under § 1447(e). In its August 27, 2008 Order, the Court specifically observed 15 that § 1447(e)’s factors weigh in favor of joinder: 16 18 To the extent that the joinder of Mr. Hanley may destroy subject matter jurisdiction, the Court has reviewed [§ 1447(e)’s] considerations and finds that the joinder of Mr. Hanley should be permitted. 19 (Dkt. # 32 at 3 n.1.) Accordingly, the Court has already rejected the argument that 20 Defendants now raise in their Motion to Dismiss. See Agostini v. Felton, 521 U.S. 203, 206 21 (1997) (“Under [the law of the case] doctrine, a court should not reopen issues decided in 22 earlier stages of the same litigation.”). Moreover, to the extent that Defendants indicate that 23 the Court should have reserved judgement and afforded the parties an additional opportunity 24 to brief this issue, the Court disagrees. When Plaintiff moved to amend her complaint and 25 add Mr. Hanley, Defendants were aware that joinder of Mr. Hanley would likely impact the 26 Court’s jurisdiction over this case. In their Notice of Removal, Defendants acknowledged 27 that Plaintiff appeared to be an Arizona resident when she filed the complaint in state court. 28 (See Dkt. # 1.) Defendants were also aware that Mr. Hanley was an Arizona resident when 17 -3- 1 they filed their response to the motion to join Mr. Hanley. (See Dkt. # 30 at 3.) Thus, while 2 Defendants now argue that joinder was inappropriate under § 1447(e), Defendant should 3 have raised these arguments in response to Plaintiff’s original motion to amend. Defendants 4 arguments, therefore, are waived. Yet, even upon reexamination of these factors, the Court 5 again finds that joinder of Mr. Hanley was appropriate. 6 1. Just Adjudication of the Controversy 7 The Court first considers whether Mr. Hanley is “necessary for just adjudication of 8 the controversy.” Bonner, 461 F. Supp. at 1119–20. Under Federal Rule of Civil Procedure 9 Rule 19(a), a necessary party is a person “having an interest in the controversy, and who 10 ought to be made [a party], in order that the court may act on that rule which requires it to 11 decide on, and finally determine the entire controversy, and do complete justice, by adjusting 12 all the rights involved in it.” CP Nat. Corp. v. Bonneville Power Admin., 928 F.2d 905, 912 13 (9th Cir. 1991) (citation and internal quotations omitted). But, while a court considers 14 “whether a party sought to be joined after removal would meet the standard for a necessary 15 party, amendment under section 1447(e) is a less restrictive standard than for joinder under 16 Rule 19(a).” Falcon v. Scottsdale Ins. Co., 2006 WL 2434227 at *2 (E.D. Wash. Aug. 21, 17 2006) (citing IBC Aviation Servs. v. Compania Mexicana de Aviacion, S.A. de C.V., 125 F. 18 Supp.2d 1008, 1012 (N.D. Cal. 2000)); see also Mayes v. Rapoport, 198 F.3d. 457, 462 (9th 19 Cir. 1999) (holding that Rule 19(a) does not control the issue of joinder of a 20 diversity-destroying defendant because under § 1447(e) the decision to permit joinder is left 21 to the discretion of the district court). Hence, even when a party would not be necessary 22 under Rule 19(a), a court may still find that joinder is appropriate for the just adjudication 23 of the controversy if there is a high degree of involvement by the defendant in the 24 occurrences that gave rise to the plaintiff’s cause of action. Falcon 2006 WL 2434227 at *2; 25 see also Desert Empire Bank v. Ins. Co. of N. America, 623 F.2d 1371, 1373–74, 1376 (9th 26 Cir.1980) (permitting joinder of an insurer who denied the existence of an insurance contract, 27 so that plaintiff could pursue counts of fraud or negligent misrepresentation). 28 -4- 1 In this case, Mr. Hanley is alleged to be significantly involved in the occurrence 2 giving rise to Plaintiff’s claims. The Amended Complaint indicates that Mr. Hanley is not 3 “simply tangentially related to Plaintiff’s causes of action.” See Falcon, 2006 WL 2434227 4 at *2 (finding the just adjudication factor to weigh in favor of joinder when a non diverse 5 defendant’s involvement is more than tangential). Plaintiff alleges that Mr. Hanley was one 6 of the managers who allowed the exercise equipment at issue to operate unattended. 7 Accordingly, even though Mr. Hanley does not appear to be a necessary party under Rule 8 19(a), the Court concludes this factor does not weigh against permitting his joinder. 9 2. Statute of Limitations/Parallel Action 10 Next, the Court must determine whether the Plaintiff would still be able “to bring an 11 action in state court against the putative defendant.” See Bonner, 461 F. Supp.2d at 1119–20. 12 With respect to this factor, Plaintiff does not argue that a new action against Mr. Hanley in 13 state court would be time-barred under Arizona law. Thus, because Plaintiff may still be able 14 to bring her claim against Mr. Hanley in state court, this factor does not weigh in favor of 15 joinder. See Clinco v. Roberts, 41 F. Supp.2d 1080, 1083; Boon v. Allstate Ins. Co., 229 F. 16 Supp.2d 1016, 1023 (C.D. Cal. 2002); but see IBC Aviation Servs., 125 F. Supp.2d at 1012 17 (permitting joinder of non diverse defendants under section 1447(e) even though a separate 18 action would not have been time-barred as requiring a plaintiff to litigate the same issues in 19 two forums would be a waste of judicial resources and risks inconsistent results). 20 3. Timeliness 21 The Court must next determine whether Plaintiff’s joinder was attempted in a timely 22 fashion. See IBC Aviation Servs., 125 F. Supp.2d at 1012. In the instant matter, Plaintiff filed 23 her first motion to remand just a week after the Notice of Removal, arguing that the manager 24 of the exercise center where she sustained her injuries was an Arizona resident. (Dkt. # 9.) 25 In denying the motion to remand without prejudice, as the manager was not specifically 26 named and identified in the Complaint, the Court noted, “Upon discovery of the identity of 27 the additional potential defendants, Plaintiff may file a motion to join those parties and seek 28 remand, if proper at that time.” (Dkt. # 10 at 2.) Shortly thereafter, Plaintiff identified Mr. -5- 1 Hanley, and filed her motion to amend. (Dkt. # 22.) Because Plaintiff acted in compliance 2 with the Court’s Order, the Court finds that Plaintiff acted in a timely fashion and did not 3 unreasonably delay in filing her Amended Complaint. See e.g., Clinco, 41 F. Supp.2d at 1083 4 (C.D. Cal. 1999) (finding that an amendment less then six weeks after removal was 5 reasonable). Thus, the Court holds that the timing of Plaintiff’s Amended Complaint weighs 6 in favor of permitting Mr. Hanley’s joinder. 7 4. Plaintiff’s Motive for Joinder 8 Next, because the presence of Mr. Hanley will defeat the Court’s diversity 9 jurisdiction, the Court must “look with particular care” at Plaintiff’s motive for seeking 10 joinder. Desert Empire Bank, 623 F.2d at 1376; see also Bonner, 461 F. Supp.2d at 1119–20. 11 Although Defendants contend that Plaintiff seeks to join Mr. Hanley simply to destroy 12 diversity, they point merely to the timing of Plaintiff’s motion to amend to suggest that 13 Plaintiff had an improper motive in filing her Amended Complaint. (See Dkt. # 39 at 3.) The 14 Court, however, “declines to impute an improper motive to Plaintiff simply because Plaintiff 15 seeks to add a non-diverse defendant post-removal.” See Falcon, 2006 WL 2434227 at *3 16 (citing IBC Aviation Servs., 125 F. Supp.2d at 1012.) In light of Plaintiff’s allegations, the 17 Court finds Plaintiff’s desire to join Mr. Hanley as a Defendants to be reasonable and 18 justified since he may be directly responsible for the negligent conduct at issue. Accordingly, 19 this factor does not weight against joinder under § 1447(e). 20 5. Validity of Claims 21 Next, the Court must determine the “apparent merit of the claims against” Mr. Hanley. 22 See Bonner, 461 F. Supp. at 1119–20. Here, the Court finds, and Defendants does not argue 23 otherwise, that Plaintiff may have valid claims against Mr. Hanley. Indeed, these claims on 24 their face indicate that Mr. Hanley may be directly involved in the alleged negligence 25 asserted against Life Time. Thus, this factor weighs in favor of permitting joinder of the non 26 diverse Defendant. 27 /// 28 /// -6- 1 6. Possible Prejudice 2 Finally, the Court must consider whether Plaintiff would suffer prejudice without 3 joining Mr. Hanley. See Bonner, 461 F. Supp.2d at 1119–20. With respect to this final factor, 4 preventing Plaintiff from joining Mr. Hanely “would require Plaintiff to choose between 5 pursuing a parallel action in state court involving redundant litigation arising out of the same 6 facts and legal issues, or foregoing her potential claims” against Mr. Hanley. See Falcon, 7 2006 WL 2434227 at *4. Requiring Plaintiff to litigate the same issues in two forums would 8 also be a waste of judicial resources and risks inconsistent results. See id. Thus, since 9 Plaintiff would likely be prejudiced, this factor also weighs in favor of permitting joinder. 10 7. Summary of § 1447(e) Factors 11 Thus, the Court finds that the joinder is appropriate under § 1447(e). Here, the Court 12 finds that Mr. Hanley is not merely tangentially related to Plaintiff’s claims, that joinder 13 preserves scarce judicial resources, and that joinder of Mr. Hanley reduces the risk of 14 inconsistent results. In addition, the Court finds that Plaintiff did not unreasonably delay in 15 seeking to file its Amended Complaint, that the claims against Mr. Hanley appear valid on 16 their face, and that failure to join Mr. Hanley would prejudice the Plaintiff. 17 II. Plaintiff’s Motion to Remand is Granted. 18 Having determined that joinder of Mr. Hanley was appropriate under § 1447(e), the 19 Court grants Plaintiff’s Motion to Remand. Here, the Courts decision is guided by 28 U.S.C. 20 § 1447, which provides, “If at any time before final judgment it appears that the district court 21 lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c). Courts 22 are to strictly construe the removal statute against removal jurisdiction. See Shamrock Oil & 23 Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941); see also Gaus v. Miles, Inc., 980 F.2d 24 564, 566 (9th Cir. 1992); Mesa Indus., Inc. v. Eaglebrook Prods., Inc., 980 F. Supp. 323, 324 25 (D. Ariz. 1997). There is a “strong presumption” against removal jurisdiction, and “[f]ederal 26 jurisdiction must be rejected if there is any doubt as to the right of removal in the first 27 instance.” Gaus, 980 F.2d at 566 (emphasis added); see Mesa Indus., 980 F. Supp. at 324. 28 “The ‘strong presumption’ against removal jurisdiction means that the defendant always has -7- 1 the burden of establishing that removal is proper.” Gaus, 980 F.2d at 566; see Lew v. Moss, 2 797 F.2d 747, 749 (9th Cir. 1986) (“[T]he party asserting diversity jurisdiction bears the 3 burden of proof.”); see also Mesa Indus., 980 F. Supp. at 324. 4 Here, it is undisputed that Plaintiff was an Arizona resident when she filed her claim. 5 It is also undisputed that Mr. Hanley is an Arizona resident. Because there is a lack of 6 complete diversity as required for removal of the instant case under 28 U.S.C. § 1332, the 7 Court remands this cause of action to Maricopa County Superior Court. 8 IT IS THEREFORE ORDERED: 9 (1) Defendants’ Motion to Dismiss Mr. Hanley is DENIED (Dkt. # 39); 10 (2) Plaintiff’s Motion to Remand is GRANTED (Dkt. # 38); and 11 (3) The Clerk of the Court is directed to REMAND this action back to Maricopa 12 13 County Superior Court. DATED this 22nd day of December, 2009. 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -8-
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